le Bar des Potos

ONGC may invite Cairn India, Vedanta Resources for signing royalty agreement
3 Oct, 2011, 0302 hrs IST, PTI
NEW DELHI: State-owned Oil & Natural Gas Corp may this week invite Cairn India and Vedanta Resources for signing of an agreement on sharing of statutory levies on the all important Rajasthan oilfields.

The ONGC board had on September 27 agreed to waive its pre-emption rights and give consent to London-based miner Vedanta buying majority stake in Cairn India.

But the state-owned oil explorer had added a caveat that the no-objection certificate or NOC will be issued only after Cairn and Vedanta sign a legal document agreeing to share royalty and pay cess on oil produced from Rajasthan fields.

"ONGC may in next couple of days send a draft agreement to Cairn India and upon their agreeing to the language and content, the pact will be signed within this week," a source in knowledge of the development said.

On signing of the agreement, ONGC will give NOC to the deal but the transaction will conclude only after the home ministry gives security clearance to Vedanta buying majority stake in Cairn India.

Cairn India does not pay royalty on its 70%stake in the fields.

3 Oct 2011

CAIRN India, the subsidiary of Edinburgh-based Cairn Energy being part-sold to Vedanta Resources, yesterday said it has discovered a natural gas deposit in Sri Lanka’s offshore Mannar Basin.

“Further drilling will be required to establish the commerciality of the discovery,” Cairn said in a statement yesterday.

Meanwhile, Cairn Energy last month cleared another hurdle in the way of selling the bulk of the company’s stake in its Indian business to Vedanta Resources for $4 billion (£2.5bn).